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The announcement that Dollar Tree is raising its prices to $1.25 might seem like old news, but this is only the beginning. “This decision is permanent and is not a reaction to short-term or transitory market conditions,” says the retail brand. Dollar Tree is also the parent company of Family Dollar, which is already experiencing pushback from loyal customers. While CEO Mike Witynsky says inflation is necessary to survive the changing market, some analysts claim it’s a bad move. The New York Times predicts the extra cushion of income many Americans rely on is coming to an end early next year. As such, consumers will be on the hunt for the best bargains. If the Dollar Tree brand is no longer the most affordable option, they may lose business.
Of course, this is just the start. NPR reports that inflation is at the highest point it has ever been in 40 years. In New York, pizzerias famous for $1 pizza slices are becoming increasingly hard to find. Gas is 58% more expensive than last year and steak is up 25%. Even SPAM, renowned for being a cheap source of meat, is increasing prices due to high demand.
So where will inflation end? The truth is, it may not. As the new year draws closer, consumers on tight budgets will find it increasingly hard to depend on the cheap brands they’ve come to love.
How do you believe inflation will affect the economy in 2022? Let us know down in the comments.
This article originally published on GREY Journal.